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Merchants wary of minimum-wage hike

By Amanda Burke, aburke@sentinelandenterprise.com

Updated:
09/20/2017 08:16:05 AM EDT

A minimum-wage hike was discussed by Beacon Hill lawmakers during a public hearing Tuesday, when back in the Twin Cities local businesses cautioned that raise would hit consumers' checkbooks, and impact their ability to hire.

"It's great for people to make money," said Rick Hajjar, owner of Surfside Pools Co. and Sports Loft Ski & Snowboard Shops in Fitchburg. "I don't begrudge them for making money, but the only alternative we have to be competitive is to raise prices."

Hajjar said he has 50 employees at locations in Massachusetts and New Hampshire, where earnings range from the state minimums to technicians earning $25 per hour.

When lawmakers in voted to raise the minimum wage from $8 to $11 over three years in 2014, Hajjar's prices ticked up accordingly, he said.

He expects to do the same if another state-mandated raise comes, especially, Hajjar said, at a time when online retailers are swallowing up his customer base.

"We have to complete with places like Amazon," he said. "The only option we have as the rates go up is we have to raise prices."

Cities including San Francisco in recent years took a local approach to the issue of minimum wage, bumping theirs to $14 an hour, a few dollars over the statewide wage floor.

Hajjar said Boston, home to some of the highest rents in the nation, could consider raising their minimum wage within city limits. To "impose" those wages in a place like Fitchburg makes little sense, he said.

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"I wish it could be a city-wide thing," said Hajjar, adding he would raise wages for veteran employees who already make more than the proposed increase.

Restaurant workers and their advocates have been the most vocal supporters of a $15 statewide minimum wage. Under state law, employers can pay tip-earners well under minimum wage, but must pay the difference their tips plus wages does not amount to at least $11 an hour.

Charlie Piermarini, the longtime manager at Happy Jacks restaurant in Leominster, said the employees he manage "deserve to make a lot of money."

But, he said, food costs fluctuate at the mercy of global markets, rising each time a natural disaster or political strife disrupts the supply chain.

The restaurant absorbs these costs, because "it's not like we can print out another menu and raise prices," said Piermarini.

Staff, he said, would be reduced if expenses rise after a minimum-wage increase.

"Where do you cut costs? In this business the only place you can cut costs is personnel," said Piermarini.

The manager of Play it Again Sports, a local branch of the franchised sporting equipment company, said money is already tight.

"Our budget doesn't grow because we have to pay someone more, our services and our finances are something we work hard for everyday. It's not like there's extra money floating around," said Jacob Veilleux. "Everyone thinks it's going to come out of the CEO's pockets, but it's not."

Chief Executive of Westminster-based Aubuchon Hardware, Will Aubuchon IV, said "there is incredible wage inequality" in the country, though he said "to use minimum wage as a tool to overcome income inequality, I don't agree that that's the right policy."

Many of Aubuchon's 516 Massachusetts employees stated at minimum wage, some of them high-school students getting their first taste of the working world.

Raising the minimum wage to $15 an hour, Aubuchon said, will "cause a lot of companies like Aubuchon Hardware to question if they can hire as many people ... Does it really need to be a $15 dollar an hour job when it's someone that's really just starting out in life?"

Roy Nascimento, president of the North Central Massachusetts Chamber of Commerce, agreed. He said minimum-wage jobs are meant to be "starting jobs," not "jobs where people are going to be supporting their families."

Small businesses will be hit hardest by any raising of the wage floor, Nascimento said. Some of them may look to automation to reduce, or in some cases wipe out labor expenses all together.

Helping low-wage employees gain the skills needed to break into higher-wage professions would improve laborers' opportunities while ensuring companies don't come to believe it's too expensive to do business in Massachusetts, said Nascimento.

"A better way to deal with this is education and workforce development," he said.

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